Header$type=social_icons

$hide=mobile

AUDIT 44AB BUSINESS PROFESSION MEANING

Section 44AB defines separate Limit for Business(60lakh) and Profession(15Lakhs) ,so it is essential to understand what is business and what is profession . Few point to resolve this issue has been given here under for your ready reference.

`Profession' and `business' explained

The term "business" is defined in section 2(13) of the Act, as under :-"Business" includes any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.The word `business' is one of wide import and it means activity carried on continuously and systematically by a person by the application of his labour or skill with a view to earning an income. The expression "business" does not necessarily mean trade or manufacture only -Barendra Prasad Roy v ITO [1981] 129 ITR 295 (SC).

Section 2(36) of the Act defines profession to include vocation.Profession is a word of wide import and includes "vocation" which is only a way of living. - CIT v. Ram Kripal Tripathi [1980] 125 ITR 408 (All).

Whether a particular activity can be classified as `business' or `profession' will depend on the facts and circumstances of each case. The expression "profession" involves the idea of an occupation requiring purely intellectual skill or manual skill controlled by the intellectual skill of the operator, as distinguished from an operation which is substantially the production or sale or arrangement for the production or sale, of commodities. - CIT Vs. Manmohan Das (Deceased) [1966] 59 ITR 699 (SC).

The following have been listed out as professions in section 44AA and notified thereunder (Notifications No. SO-17(E) dated 12.1.77 and No.SO 2675 dated 25.9.1992):